DAIRY farmers can expect higher opening farmgate milk prices from this July, according to industry investment group Dairy Australia.
The analysis, part of DA's 2013 Situation and Outlook report, was released yesterday.
"Australia's milk production will see modest growth in 2013/14, increasing from 9.35 billion litres this season to between 9.4 and 9.6 billion litres next season.
"Dairy Australia's analysis of current commodity price and exchange rate settings indicates an opening price for 2013/14 of around $5 a kilo, compared to the 2012/13 opening price of $4.30 a kilo."
The organisation says this implies "a potential full-year average price around $5.50a kilo, up from $4.90 to $5.10 a kilo.
DA managing director Ian Halliday said the report "suggests that 2013/14 could be a year of recovery for many farmers".
"Farmgate prices are expected to open higher than the current season and global indicators suggest grain prices should moderate through late 2013.
"However, the key wildcard will be the weather," he said.
"We are seeing a rising market driven by supply constraints from the major exporters, notably the drought in the US and New Zealand."